WORLD STEEL DYNAMICS

SteelBenchmarker TM

Operations Manual

November 3, 2008

World Steel Dynamics Inc. 456 Sylvan Avenue Englewood Cliffs, New Jersey 07632 Tel: (201) 503-0900 Fax: (201) 503-0901 E-mail: wsd@WorldSteelDynamics.com The information contained in this report is based upon or derived from sources that are believed to be reliable; however, no representation is made that such information is accurate or complete in all material respects, and reliance upon such information as the basis for taking any actions is neither authorized nor warranted. A variety of factors, including changes in prices, shifts in demand, variations in supply, international currency movements, technological developments, governmental actions and/or other factors, including our own misjudgments or mistakes, may cause the statements herein concerning present and future conditions, results and trends to be inaccurate. The officers, directors, employees or stockholders of World Steel Dynamics Inc. do not, directly or indirectly hold securities of, and/or that are related to, any of the companies that are referred to herein. World Steel Dynamics Inc. may act as a consultant to one or more of the companies mentioned in this report. Copyright © 2008 by World Steel Dynamics Inc. all rights reserved.

SteelBenchmarkerTM

Operations Manual

Table of Contents

Page

Background 1

Product coverage 4 Regional coverage 5

Step-by-Step Procedures

Registration 7 Data Submittal 11 Data Management 12 Benchmark Price Release 13 Confidentiality and Security 15

SteelBenchmarkerTM Website 17

Antitrust Opinions 19

USA EU

1

SteelBenchmarkerTM Operations Manual

Background The SteelBenchmarkerTM is designed to provide a reliable index of the current “standard” or “base” transaction prices for use by participants in the steel industry. The steel benchmark prices generated by the SteelBenchmarkerTM system are ultimately expected to be derived from at least 1,000 price assessment providers – consisting of steel mills, steel traders, steel service centers, large and small steel users and steel scrap processors. The steel products for which we are asking price assessments are the benchmark (generic) ones that are discussed, day in and day out, when steel buyers and sellers are seeking to “discover” the base market price for the commodity in question. The reported “standard” transaction prices reflect the price provider’s most recent actual transaction prices adjusted to eliminate any surcharges or add-ons that may have impacted the actual price paid. Once established, the steel industry and the financial trading industry will have investable and robust steel benchmark prices.

• By investable, we mean that exchanges and firms engaged in over-the-counter (non-exchange based) transactions will be able to use the steel benchmark prices to create financially settled steel prices – i.e., no physical delivery – that permit the forward hedging of the steel price risk.

• By robust, we mean that there will be so many providers that the results will not

be able to be manipulated. Substantial product depth and geographic breadth is necessary, if steel mills, traders, service centers and users are to depend on the system. The salient features of the SteelBenchmarkerTM include:

• Product coverage – benchmark prices for commodity-grade hot-rolled band, cold-rolled coil, rebar, standard plate and steel scrap.

• Regional coverage – for steel products, regions of the world include the USA

(east of the Mississippi), Western Europe and the world export market. For steel scrap, #1 heavy melting and #1 busheling, the region is the United States east of the Mississippi; and for shredded its for all USA markets but the West Coast (California, Oregon and Washington).

• Detailed product definition – for steel products, transaction price assessments for

the generic commodity-grade products for a mid-sized buyer as outlined in the “product specifications” on page 4.

2

• Processing of the information – in a way that is assured to be reliable, confidential, consistent and transparent.

• Available – non-providers are able to subscribe FREE to the twice per month

benchmark price releases. • Easy access – with all providers and designated others receiving the benchmark

prices at the same time when they are released. SteelBenchmarkerTM will have its internal information-gathering processes and procedures audited on a regular and unannounced basis by a respected independent auditor, such as an accounting firm with expertise in financial risk procedures. The designated processes and procedures are designed to assure that: a) the SteelBenchmarkerTM data input by provider is kept confidential from all sources; b) the data is being processed correctly by a third-party computer to create benchmark prices; c) the benchmark prices are being dispensed in a manner that gives all designated groups access to them at the same time; and d) the policies and procedures set forth in this Operations Manual are being adhered to. Yet, the price assessment providers will have the opportunity to speak, if they wish, with SteelBenchmarkerTM staff members about the steel benchmark system in general (but never discuss, or even give a hint about, their specific price inputs). Here is what will, and will not, be known about the providers and the price assessments that they are submitting:

• The specific providers of specific price inputs by product will never be known by any person or group at any time (not even the designated auditor). (Note: The computer program will be monitored regularly to be sure that the price inputs are handled properly.)

• The distribution of the price inputs, but not the sources of the individual inputs,

will be seen only by the independent computer operator/statistician at a third party location, the independent auditor of the SteelBenchmarkerTM system and, five days after the benchmark prices are published, by a designated WSD employee, who will be responsible for ensuring that the SteelBenchmarkerTM system is working as expected.

• The names of the price assessment providers and the steel products (or scrap) for

which they are submitting the price assessment, but not the individual price assessments, will be known to a select group of employees at World Steel Dynamics. This group of people will receive notice, after the benchmark prices are published, which providers did or did not provide the price inputs that they agreed to. Hence, if a provider failed to provide its price assessment, it may receive an e-mail or a telephone call asking what happened. (Note: There will never be a discussion of the provider’s price input.)

3

The data to be provided by the price assessment providers is their most recent standard transaction price granted that the price comes under definition of that for a mid-sized buyer (as per the product specification on the following page).

1. The “standard” or “base” price is a generic, commonly understood price benchmark that is used by market participants as the key price reference for pricing customized transactions.

2. Price providers are to adjust transaction prices to the standard transaction prices so that they do not reflect any one-time discount prices, secondary or off-grade steel prices, lower prices for excess-prime steel material or lower prices for hot-rolled band produced from excess slab in a mill’s inventory.

3. The participant will NOT discuss or disclose his or her input with anyone outside

of his or her company, or discuss how the reported benchmark price varied from his or her input.

4. The participant will provide his or her price input to the third-party computer via

the “data submission” e-mail for the second and fourth Mondays of the month. No other data will be provided, or disseminated, by the provider to the third-party collector, or anyone else, that would permit identification of suppliers, customers, products, dates or quantities of actual transactions.

5. The price assessment provider will not reveal to anyone outside his/her company

that it is a price assessment provider. If the person who is the price assessment provider (at a company) is having discussions about the steel market with any person outside his or her company, including those at World Steel Dynamics, the price assessment submitted must never be revealed or discussed even on an approximate basis.

4

Product Coverage The SteelBenchmarkerTM gathers assessments on the “standard” transaction prices reflecting the price provider’s most recent actual transaction price adjusted to eliminate any surcharges or add-ons that may have impacted the actual price paid for these products in U.S. dollars per metric tonne, 500 to 2,000 tonnes transaction size. For the USA also on a net ton or cwt basis and for Western Europe also on an Euros per metric tonne basis.

• Hot-rolled band – standard-sized and commodity-grade for near-term delivery ex-works (FOB mill) or FOB port of export.

• Cold-rolled coil – standard-sized and commodity grade for near-term delivery ex-works (FOB mill) or FOB port of export.

• Rebar – #5 (5/8” in diameter) and commodity grade for near-term delivery ex-works (FOB mill) or FOB port of export.

• Standard plate – standard-sized and commodity grade for near-term delivery ex-works (FOB mill) or FOB port of export.

• Steel scrap – standard grade, delivered to steel plant on a near-term basis, normally from two days to a month.

#1 heavy melting – demolition scrap that is at least ¼” thick and surface dimension no larger than 60 by 24 inches. This grade does not include the heavy “p & s” (plate and structural ) category that includes the very thick scrap items.

Shredded – largely old cars and some appliances – for all USA markets but the West Coast (California, Oregon and Washington). Shredded scrap is homogeneous iron and steel scrap magnetically separated, no. 1, no. 2 steel, miscellaneous bailing and sheet scrap with an average weight from 50 to 70 pounds per square foot.

#1 busheling – new sheet steel scrap.

Product Specifications

Hot-rolled band Cold-rolled coil Steel scrap 0.2" thick x 48-60" wide 0.03" x 48-60" wide #1 Heavy melting 5mm thick x 1200-1500mm wide 0.7mm x 1200-1500mm wide Shredded

#1 BushelingRebar #5 Standard plate 5/8" in diameter 1" x 96" x 240") 16mm in diameter 24mm x 2400mm x 6000mm

Note: Hot-rolled band is the first product off the hot strip mill with: (1) a thickness of about 0.20 inch (but no less than 0.10 inch or more than 0.50 inch); (2) a coil size of 10 to 20 tons; (3) a width of 48 to 60 inches; and (4) a carbon component of 0.08% to 0.13%.

5

Regional Coverage The pricing assessments are generated for these countries/regions:

• The USA, East of the Mississippi. This region is the location of major integrated mills, mini-sheet mills and ports to which foreign steel is delivered. This is also the region in which steel scrap generation is the most substantial and usage the greatest.

• Western Europe. This is a major steel-consuming region.

• The world steel export market. Assessments on the export price of the

aforementioned products for nearby and distant customers, FOB the port of export. For domestic markets, for hot-rolled band, cold-rolled coil, rebar and standard plate, the providers are to give their assessment of the current “standard” or “base” transaction price, on a new bookings basis, for near-term delivery (normally two to six weeks) of commodity-grade product, ex-works (the same as FOB mill) for the mid-sized buyer. Note: Hot-rolled band is the first product off the hot strip mill. The steel scrap price assessment for #1 heavy melting and #1 busheling is for the USA, east of the Mississippi, delivered to the steel plant on a near-term basis, normally from two days to a month. For shredded it is for all USA markets but the West Coast (California, Oregon and Washington). For the world export market, it is the price assessment of the average export price for nearby and distant customers, FOB the port of export. Given that the range of product prices being booked in the marketplace may be substantial at times, each provider will be expected to exercise its best judgment when providing its assessment. The reported “standard” transaction prices are to reflect the price provider’s most recent actual transaction prices adjusted to eliminate any surcharges or add-ons that may have impacted the actual price paid.

6

7

Step-by-Step Procedures

Registration Companies agreeing to participate as price assessment providers to the SteelBenchmarkerTM are requested to have the designated provider/providers sign up on the third-party host computer http://www.steelbenchmarker.com.

• Each company will determine whether it will be a single or multi assessment provider. A company may choose to submit a number of primary assessment provider registrations based on product specialty or facility location.

• For each registration, a participating company is asked to designate three

individuals, each of whom is a market participant familiar with developments in the actual transaction prices for the commodity in question to be the price providers. One individual will be the designated primary provider, and the other two the back-ups.

• For each registration, a confidential code number will be created by a secure third

party computer that is not located at World Steel Dynamics.

• Each provider’s price inputs by product will never be matched up with the provider at any time (not even by the designated auditor). (Note: The computer program will be tested regularly to be sure that the price inputs are handled properly.)

• The distribution of the price inputs will be seen only by the independent computer

operator/statistician at a third party location, the independent auditor of the SteelBenchmarkerTM system and, five days after the benchmarker prices are published, by a designated WSD employee, who will be responsible for ensuring that the SteelBenchmarkerTM system is working as expected.

• The name of providers and the steel products (or scrap) for which they are

submitting the price assessment, but not the individual input prices, will be known to a select group of employees at World Steel Dynamics.

8

SteelBenchmarker™ Participation Agreement

The purpose of the SteelBenchmarkerTM is to provide a reliable set of benchmark prices for use by participants in the steel industry. To assure reliability and prevent misuse, World Steel Dynamics (WSD) agrees that participants will provide their price assessment inputs to an independent third party computer system and not directly to SteelBenchmarkerTM, and that no person or group will ever be able to connect a price input to a specific provider. Aggregated average prices will be published only if at least 10 inputs are provided per product, with the expectation that there will eventually be many times this figure.

The SteelBenchmarkerTM output will consist of objectively calculated averages of price assessment inputs. So that the input data will be as reliable and confidential as possible, as a condition to its participation as a data provider to SteelBenchmarkerTM each participant agrees to the following: 1. The data provided by the participant is their most recent transaction price granted that

the price comes under definition of that for a mid-sized buyer (as per the product specifications).

2. The participant will NOT discuss or disclose its input, including how the reported benchmark price varied from its input, with or to any other provider of SteelBenchmarkerTM input or anyone else, and, in particular, the participant will NOT discuss or disclose its input with or to any competitor or any employee of SteelBenchmarkerTM.

3. The participant will not disclose to anyone outside its own operation that it is a provider of input to the SteelBenchmarkerTM, what the nature of its input is or what products or geographic markets that input encompasses.

4. The participant will not provide the third-party collector of SteelBenchmarkerTM input with any information that would permit identification of suppliers, customers, products, dates or quantities of actual transactions.

Participating company register at:

http://www.steelbenchmarker.com

World Steel Dynamics

9

To register please go to http://www.steelbenchmarker.com and submit data. Do not mail this form.

SteelBenchmarkerTM Provider Registration Form

Note: Multi-registrations are permitted per company by product or location of facilities, i.e., a company may designate more than one primary assessment provider.

Name of company: _________________________________________

_________________________________________

Category of provider: Steel mill __________ Scrap processor __________ Steel user __________ Other __________ Steel trader or service center __________ Title of Provider: ________________________ Primary provider (e-mail): ________________________ Back-up person #1 (e-mail): ________________________ Back-up person #2 (e-mail): ________________________

Please check below the price assessments that are to be provided. See pages 4 and 11 for product specifications. USA – East of Mississippi Hot-rolled band _____ Cold-rolled coil _____ Rebar _____ Standard plate _____ Steel scrap

#1 Heavy melting _____ Shredded _____ #1 Busheling _____

Western Europe – Germany/France Hot-rolled band _____ Cold-rolled coil _____ Rebar _____ Standard plate _____ World export market Hot-rolled band _____ Cold-rolled coil _____ Rebar _____ Standard plate _____

10

Data Submittal The price assessment providers at each participating company, when it comes to providing the price assessment, will communicate only with the secure third-party computer that is not located at the offices of World Steel Dynamics. The third-party computer is programmed to: a) notify each price provider when the pricing inputs are needed; b) send additional notices when the price has not been provided; and c) send a confirming notice when the price has been provided. (Note: The name of the price providers at each company, but not the price provided, will be known to a select group of people at World Steel Dynamics. This group will be assigned to maintain communications with the providing company. It will stay on top of whether or not the providing company is continuing to provide the price assessment quotes. It will communicate to people at the company via telephone and e-mail – always making it clear that the subject of price must never come up. This group will save all of the e-mail communications and keep a log of all telephone calls – including the time of the call, the length of the call and the subject discussed.) Regarding the communication with the third-party offsite computer, here are the circumstances that we expect:

• On the Fridays preceeding the second and fourth Mondays of the month, the primary price assessment provider for each registration at each participating company will be sent an e-mail message that the pricing assessment is, or assessments are, due on Monday.

• The pricing inputs will be based on your company’s assessment of the actual

transaction bookings price for near-term delivery to mid-sized buyers for the various products in which you are involved in the marketplace.

• If the requested price input has not been received by 9:00 a.m. on the second and

fourth Mondays of each month, New York time, the primary and secondary providers will be e-mailed a second request by the host computer.

• If the input is not received by 9:00 a.m. on Tuesday, a final request will be made

to the tertiary provider. Submissions are due by 5:00 p.m. Tuesday, New York time. (Note: These notices will be sent automatically by the third-party computer – although its operation will be monitored by a computer person at the off-site location.)

• The submitted price, will be processed by a secure third-party computer.

11

SteelBenchmarkerTM Price Assessment Provision Form

Spot Market New Booking Prices for Near-Term DeliveryCommodity-grade product to mid-sized buyers

(Dollars per Metric Tonne, 500 to 2,000 tonnes transaction size)

USA MarketEast of the Mississippi

Western Europe MarketGermany/France

FOB mill Ex-works

Hot-rolled band * Hot-rolled band * (0.2" thick x 48-60" wide) (5mm thick x 1200-1500mm wide) Cold-rolled coil * Cold-rolled coil * (0.03" x 48-60" wide) (0.7mm x 1200-1500mm wide) Rebar #5 * Rebar #5 * (5/8" in diameter) (16mm in diameter) Standard plate * Standard plate * (1" x 96" x 240") (24mm x 2400mm x 6000mm) Steel scrap ** #1 Heavy melting Shredded - all but West Coast #1 Busheling

World Export MarketAtlantic and Pacific Basin

FOB port of export

Hot-rolled band *** (5mm thick x 1200-1500mm wide) Cold-rolled coil *** (0.7mm x 1200-1500mm wide) Rebar #5 *** (16mm in diameter) Standard plate *** (24mm x 2400mm x 6000mm)

Note: Near-term delivery is normally two to six weeks. Hot-rolled band is the first product off the hot strip mill with: (1) a thickness of about 0.20 inch (but no less than 0.10 inch or more than 0.50 inch); (2) a coil size of 10 to 20 tons; (3) a width of 48 to 60 inches; and (4) a carbon component of 0.08% to 0.13%.

* Ex-works (the same as FOB mill). ** Steel scrap delivered to steel plant on a near-term basis, normally from two days to a month. #1 heavy melting – demolition scrap that is at least ¼” thick and surface dimension no larger than 60 by 24 inches. This grade does not include the heavy “p & s” (plate and structural ) category that includes the very thick scrap items.

Shredded – largely old cars and some appliances – for all but the West Coast (California, Oregon and Washington). Shredded scrap is homogeneous iron and steel scrap magnetically separated, no. 1, no. 2 steel, miscellaneous bailing and sheet scrap with an average weight from 50 to 70 pounds per square foot. #1 busheling – new sheet steel scrap.

*** FOB port of export

12

Data Management

• The third-party computer, as programmed, starting on Tuesday afternoon, will start to calculate the benchmark prices for all of the product categories based on the inputs already received. During this time, the computer person/statistician who is monitoring the operation of the off-site computer will be cross-checking that the computer is working as expected/programmed.

• On Wednesdays following the second and fourth Mondays of each month, the off-

site computer, supervised by a computer person/statistician dedicated to this effort, will finalize the benchmark prices to be released.

• Our goal for each product category is to have at least 25 to 50 inputs.

• No individual company’s reported assessments will represent more than fifteen

(15) percent of the assessments used to calculate any reported benchmark price. In order to ensure that this is the case, if, for any product, fewer than fourteen (14) price inputs are reported by companies providing assessments, no single company will be allowed to designate more than one assessment provider with respect to that product.

• The provided assessments will be gathered by category and averaged. In the

process, some of the provided prices may be rejected as outliers.

• Providers to the SteelBenchmarkerTM will not be informed that their price assessment has been rejected as an outlier if this has been the case.

• The steel benchmark price figures will never be restated or adjusted after the fact.

• The SteelBenchmarkerTM seeks to eliminate an upward or downward bias in the

benchmark prices by including steel mills, large and small buyers, steel traders and steel service centers (and steel scrap processors in the case of steel scrap) in the assessment providing groups.

• “Fall back” procedures will be established, as required, in the case that there are

some shortcomings in the system.

13

Benchmark Price Release

• The steel product and steel scrap benchmark prices will be published simultaneously on Wednesdays following the second and fourth Mondays of each month.

• Steel benchmark prices will not be disseminated for any product category in

which fewer than ten (10) price inputs are reported by providers. In the event that, with respect to any particular product, between 10 and 20 providers have provided assessments, a benchmark price for such product will be released with a notation stating that fewer than 20 providers provided assessments with respect to such product. It is the goal of WSD to gather the assessments of 20 or more assessment providers with respect to each product for which a benchmark price is generated and if, within a reasonable period of time following the date of first publication of the benchmark price for such product, fewer than 20 assessment providers, after elimination of outliers, are providing assessments on a regular basis, WSD will discontinue publication of the benchmark price with respect to such product.

• On Wednesday morning at 9:00 a.m. New York time, the third-party computer

will e-mail the benchmark prices to the designated recipients. • Steelbenchmarker pricing analysis update will be posted by noon on the release

Wednesdays. • No one will receive the benchmark prices until they are e-mailed to the designated

list at the same time. All price providers will be on the designated list.

• Some select groups may receive the benchmark prices on a time-delayed basis.

• The steel benchmark prices will not be seen in advance by any party except for the computer person/statistician who is tracking the operation of the third-party computer.

14

STEELBENCHMARKER PRICES October 27, 2008

dollars per metric tonne (net ton) [gross ton] {Euros}

Region: USA, East of the Mississippi Hot-rolled band: 886 (803) Cold-rolled coil: 979 (888) Rebar**: 798 (723) Standard plate: 1,425 (1,293) #1 Heavy melting scrap: 151 [153] Shredded scrap*: 197 [200] #1 Busheling scrap: 172 [175] Region: Western Europe Hot-rolled band: 852 {682} Cold-rolled coil: 951 {762} Standard plate**: 963 {771}

Region: World Export Market Hot-rolled band: 702 Cold-rolled coil: 756 Standard plate**: 839

NOTES:

Released October 29, 2008 at 9:00 a.m. to Price Assessment Providers. The first price release was for April 10, 2006.

If a product is not listed or a price is not indicated, fewer than ten (10) price inputs were received at this time. ** Development stage -- fewer than 20 assessment providers.

Prices are: USA -- FOB mill; Western Europe and China -- Ex-works; and World Export Market -- FOB port of export. For USA steel scrap -- delivered to the steel plant. * For shredded scrap the region is “for all but the West Coast (CA, OR & WA)”.

For product specifications go to www.steelbenchmarker.com/specifications.

15

Confidentiality and Security

• The provider’s price assessments will be sent to a secure third-party computer that converts the identity of each price provider to a coded number. No person will ever connect a price input to the name of the provider. The distribution of price inputs, but not the sources of the individual inputs, will be seen only by the independent computer operator/statistician at a third party location, the independent auditor of the SteelBenchmarkerTM system and, five days after the benchmark prices are published, by a designated WSD employee, who will be responsible for ensuring that the SteelBenchmarkerTM system is working as expected.

• The providing company must never reveal that it is a SteelBenchmarkerTM provider.

And, in their regular discussions with outside contacts, the staff members who are the price providers must never reveal that this is the case. Even if a staff member is a price provider and, by chance, he or she is on the telephone with WSD employees discussing the steel price outlook, the subject of the SteelBenchmarkerTM submission and the price must never come up.

• All SteelBenchmarkerTM price input related questions are to be forwarded to the host

computer operator.

• If there are general questions and the provider does not want to identify themselves, they can e-mail the question to SteelBenchmarkerTM via the confidential server. The question will arrive anonymously at SteelBenchmarkerTM, and we will attempt to answer the question.

• Selected SteelBenchmarkerTM staff members, who will have access to the names of

the companies and the products for which they are providing the price assessments, will communicate with the assessment providers as necessary.

• The SteelBenchmarkerTM staff may contact non-responding providers after the

benchmark prices are published to determine what happened.

• The World Steel Dynamics employees will never see any of the specific inputted price assessment data, nor the distribution of inputs.

• WSD will have its internal information-gathering processes and procedures audited on

a regular and unannounced basis by a respected auditor, such as an accounting firm with expertise in risk management procedures. The designated processes and procedures are designed to assure that: a) the SteelBenchmarkerTM data input by provider is kept confidential from all sources; b) the data is being processed correctly by a third-party computer to create benchmark prices; c) the benchmark prices are being dispensed in a manner that gives all designated groups access to them at the

16

same time; and d) the policies and procedures set forth in this Operations Manual are being adhered to.

• Any information leaks will be immediately reported to the auditor.

• SteelBenchmarkerTM staff members engaged in outside research will continue to speak to their industry contacts about the developments in the steel market. However, when a SteelBenchmarkerTM staff member speaks to a SteelBenchmarkerTM assessment provider, there will be no discussions, or hints, about the price assessment that the provider has e-mailed to the third-party offsite computer.

17

SteelBenchmarker TM Website

http://www.steelbenchmarker.com

If you would like to register as a price assessment provider go to: http://www.steelbenchmarker.com/Agreement

18

19

SteelBenchmarkerTM USA and EU

Antitrust Opinions

by Covington & Burling

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40